WazirX Plans 52% Debt Settlement After Cyberattack, Introduces ‘Recovery Tokens’ for
the rest
WazirX plans to resolve 52% of total creditor claims through its current liquid assets, revealed the
exchanged in its fourth townhall meeting on November 6. The remaining 48% will be distributed over the
course of time, from future profits and recoveries of the stolen assets, among other avenues.
The exchange is currently undergoing a restructuring program under the Singapore High Court, after a
cyberattack in July left it unable to pay back its creditors.
What’s the Plan?
If the creditors and the Singapore high court sanction this scheme, WazirX will distribute its net
liquid assets, totaling around $284 million, to its creditors on a pro-rata basis. The exchange will
also release a “rebalancing calculator” that will tell each user how much they are owed.
As for the remaining debt, WazirX will issue ‘Recovery Tokens’ to each creditor that they can encash in
the future, once WazirX restarts its platform and launches new business initiatives. One token will be
worth a single US dollar, distributed among users in a way that is proportionate to their claims.
The company also plans to restart its platform and allow users to trade again, which will generate
revenue through trading and withdrawal fees. The exchange expected a bull run to follow soon once the
platform restarted, which would increase trading volume.
WazirX also plans to launch a decentralised cryptocurrency exchange (DEX) and turn it into India’s
largest within 12 months, stated CEO Nischal Shetty. A DEX is a peer-to-peer crypto marketplace where
users can trade with one another without a central authority, unlike the old WazirX platform. Shetty
acknowledged that using a DEX was much more difficult and technical than a centralised exchange, but
pointed out that they were safer as users had custody of their own crypto and had reduced counterparty
risks. The exchange will also come with its native DEX token, which users can use to pay exchange fees.
WazirX will use a percentage of the revenue generated from this business to pay recovery token holders.
Finally, the company plans on selling illiquid assets, attempting to recover stolen tokens and searching
for white knights to provide rescue financing as ways of repaying creditors.
